An employment tribunal collapsed the day after former club chairman Doug Ellis said he was "distraught and upset" at accusations of racism towards Mr Rashid, claiming "he was like a son to me".

Mr Rashid refused to comment today saying he had been advised not to say anything by his legal team.

But Aston Villa spokesman Phil Mepham said: "We are delighted he has withdrawn his claim and this vindicates the company's position throughout these proceedings."

Mr Rashid, who joined Villa Park as a ball boy almost three decades ago and worked his way to the top, left the club in August 2005 after his #81,000-a-year role as commercial manager disappeared during a shake-up of non-playing staff.

Giving evidence yesterday, Mr Ellis - now honorary President of the club since the takeover by Randy Lerner -? said: "At all times I supported him, he was like a son to me.

"In all my time in football I've done all I can to applaud anything that's against racism, hence why I'm so distraught and upset that I'm being accused of being racist."

Mr Ellis said he also viewed former Villa legends Paul McGrath and Dwight Yorke as his sons.

Mr Rashid's solicitor, Simon Pine, then claimed Mr Ellis only used the term of endearment to people who weren't white.

"That's absolute rubbish," responded Mr Ellis.

Mr Ellis described how he would often have one-to-one meetings with Mr Abdul, but they became more infrequent after Bruce Langham took over as chief executive of the club.

Mr Pine claimed he began to "lose control of the father-to-son relationship" and despite their close bond he failed to intervene when Mr Rashid was made redundant.

Mr Ellis responded: "You may think I could have over-ruled the board of directors, but that's not so.

"I handed over the responsibility of the restructure [of the non-playing staff] and it had nothing to do with me."

Mr Ellis hit back at claims he once said he "would not see the day a black or Asian person was a director of Villa", describing the accusation as "utter nonsense".

He also dismissed Mr Pine's claims that he had once said racist remarks about Egyptian-born Hollywood movie star Omar Sharif during a trip to Paris.

"Omar's a good friend because we share a love of horse racing, I've never been racist about him," added Mr Ellis.

He also recalled his days serving in the Royal Navy during World War Two, where he spent 18 months working in Sri Lanka.

"I worked with many Asian people and became a father figure to them, I would go into their homes and help them with their problems," he added.

He said he had since gone on to help bring aid to people in Ethiopia and victims of the Boxing Day tsunami in 2004.